Business Planning for Indigenous Agri-Business, Bolivia

Background | Project Objectives | Description

PROJECT STATUS: ACTIVE

PARTNER/CLIENT NAME: Transierra

COUNTRY/REGION: Bolivia, Latin America

COMMUNITY DEVELOPMENT FOCUS: Community Development, Indigenous Peoples, SME, Corporate Social Responsibility

EXTRACTIVE INDUSTRY SECTOR: Oil and Gas Production

BACKGROUND

The Guarani indigenous communities are rural family groups that live in poor conditions with subsistence agricultural or farm production. Several indigenous communities regularly commercialize their produce in community fairs and localized markets or have even carried out structured sales operations with buyers. Despite such integration into the local economy, these communities face several capacity challenges in gaining broader access to markets to improve their livelihoods through the sale of agri-products.

In July 2005, Transierra, a Bolivian natural gas company, signed an agreement with the Guarani Peoples Assembly (Assemblea de Pueblos Guarani, APG) and the captaincies located within the area of influence of the Yacuiba-Rio Grande gas pipeline (GASYRG), denominated as the Indigenous Development Plan’s Support Program (PA-PDI). The PA-PDI commits USD 9 million for community development projects during the next 20 years, resulting from the profit of the GASYRG’s operation.

PROJECT OBJECTIVES

The objective of the project is to enhance the commercial viability of 4 community based agri-projects financially assisted by the Indigenous Development Plan’s Support Program implemented by Transierra. The four community based agri-projects will be demonstrative of how long-term business planning can promote sustainable community development, since the PA-PDI financial support extends over 20 years.

The impact of the project will be to increase the gross sales and net income of the community based agri-projects and indirectly the net income of other communities acting as suppliers of raw products. The project contributes to IFC’s general mandate to promote sustainable economic development and improve people’s life. The project fulfills two of the objectives of the Enhancing Local Benefits program which are: (i) strengthening the positive relations between Transierra and the communities in the influenced area, and (ii) steering Transierra’s social investment to improve local development impact.

DESCRIPTION

The advisory project will support a group of community based initiatives funded by the PA-PDI that have shown commercial potential. The 4 prioritized initiatives are: (i) Production Assistance and Grain Storage and Commercialization Services in Charagua Norte, (ii) Dairy Production in Takovo Mora, (iii) Production Assistance and Grain Storage and Commercialization Servicesin Villamontesand (iv) Cold Cut Meat Production in Yacuiba. These projects were selected by the beneficiary communities following participatory consultation methods.

The project will focus on supporting these projects with the (i) formation of an organizational structure, (ii) preparation of strategic business plans and implementation by transferring basic capacities to beneficiary communities (iii) installation of processing facilities to produce value added goods and (iv) introduction of Guarani products in larger markets by promoting medium and long term commercial agreements with buyers.

The project adheres to the World Bank Group’s commitment referred-to expanding the benefits of the extractive industries to the local population and build a relationship of mutual benefit that minimizes the risk of conflict and opposition.

Activities to date

The identification of the business concept for each agri-project has been the result of a consultation workshop with community leaders, confirmation surveys and field validation at the community level and a final assembly decision.

The implementing firm has completed the following activities relative to each agri-project:

1. Baseline surveys/data collection (at community level)
2. Productive/commercial diagnostic studies,
3. Market potential analysis,
4. Organizational model assessment and design.
5. Feasibility (cost/benefit) studies of the 4 agri-projects.
6. Four workshops for the formulation of each agri-project’s business plan that have successfully taken place and preparation of final documents is underway (Final Business Plans will be submitted in June 2008).
7. The technical assistance and business support services locally available that could form part of the network have been identified and characterized in terms of service types, areas of expertise, geographical coverage and technical capacity (the respective report will be submitted in June 2008).

The community leaders of each community based agri-project are currently in the process of submitting a written document confirming approval of the agri-project and assigning financial resources from their PA-PDI’s annual budget.